Cannabis and Marijuana Tax

Cannabis and Marijuana TaxOn November 5, 2013, Palm Springs voters approved Measure B, Ordinance 1831 approving a new tax on the proceeds of cannabis and marijuana collectives in the City of Palm Springs (City). Ordinance 1831 authorized the City Council to establish and implement the Cannabis and Marijuana Tax, which was adopted by the City Council by Resolution No. 23476, on December 18, 2013. On April 2, 2014, the City Council adopted Ordinance 1845, which amended certain sections of the Palm Springs Municipal Code relating to regulations for medical cannabis cooperatives and collectives in the City. The Cannabis and Marijuana Tax, due and payable beginning January 1, 2014, applies to all marijuana collectives operating in the City of Palm Springs.

All marijuana dispensaries, cooperatives, and collectives (Collectives) operating in the City are required to pay the City’s Cannabis and Marijuana Tax pursuant to Chapter 3.35 of the City of Palm Springs Municipal Code. Collectives operating with a valid City Council-issued permit will be taxed at the rate of ten (10) cents for each dollar (or portion thereof) of proceeds. Collectives operating without a valid City Council-issued permit will be taxed at the rate of fifteen (15) cents for each dollar (or portion thereof) of proceeds. The payment of this tax shall in no way be construed as authorizing the continuance of any illegal business or of a legal business in an illegal manner, and each such illegal operation will be subject to prosecution under the provisions of the Palm Springs Municipal Code.

Marijuana Collective
The term “marijuana collective” means any activity regulated or permitted by Section 9.23.15 of the City’s Municipal Code, or California Health and Safety Code sections 11362.5, et seq., as may be amended from time to time, or any other activity or business that involves planting, cultivating, harvesting, transporting, dispensing, delivering, providing, manufacturing, compounding, converting, processing, preparing, storing, packaging, or testing any part of the marijuana plant for medical purposes.

Audit
The Director of Finance shall have the power to audit and examine books and records of persons or businesses engaged in marijuana business including state and federal income tax returns, California sales tax returns, etc.

Disclaimer
This notice does not constitute final or complete interpretation of all legal requirements, but rather is a brief summary of the Cannabis and Marijuana Tax. For the full text of the Cannabis and Marijuana Tax, please refer to Chapter 3.35 of the City of Palm Springs Municipal Code.

For more information regarding the City of Palm Springs Cannabis and Marijuana Tax, please contact the City Attorney's office email CityAttorney@palmspringsca.gov.